Benford's Law and Fraud Detection: Facts and Legends

Abstract. Is Benford's law a good instrument to detect fraud in reports of statistical and scientific data? For a valid test, the probability of ‘false positives’ and ‘false negatives’ has to be low. However, it is very doubtful whether the Benford distribution is an appropriate tool to discriminate between manipulated and non‐manipulated estimates. Further research should focus more on the validity of the test and test results should be interpreted more carefully.     

Fact and Fiction in EU‐Governmental Economic Data

Abstract. To detect manipulations or fraud in accounting data, auditors have successfully used Benford's law as part of their fraud detection processes. Benford's law proposes a distribution for first digits of numbers in naturally occurring data. Government accounting and statistics are similar in nature to financial accounting. In the European Union (EU), there is pressure to comply with the Stability and Growth Pact criteria. Therefore, like firms, governments might try to make their economic situation seem better. In this paper, we use a Benford test to investigate the quality of macroeconomic data relevant to the deficit criteria reported to Eurostat by the EU member states. We find that the data reported by Greece shows the greatest deviation from Benford's law among all euro states.     

Economies of scale in the US computer industry: An empirical investigation using data envelopment analysis

Up to recently, economists have had no good tools to measure the returns to scale of individual corporations in an industry. Data envelopment analysis (DEA) is a linear programming technique for determining the efficiency frontier (the envelope) to the inputs and outputs of a collection of individual corporations or other productive units. While DEA offers an avenue for calculating the returns to scale of individual corporations, the approach has been riddled by mathematical complications arising from the possibility of alternate optima. The present paper develops theory for calculating the entire range of these alternate optima. Furthermore, in a quite ambitions empirical application, DEA is employed to determine the time path of returns to scale of all publicly held U.S. computer companies over the time period 1980–1991. For the great majority of companies, a unique time path is obtained; only in less than 4 percent of the linear programming calculations is an entire range of alternate optima obtained. The results indicate that the computer industry was polarized into two camps: large aging corporations with decreasing returns to scale, and swarms of small upstart companies with advanced technology exhibiting increasing returns to scale.     

Pension funds' allocations to hedge funds: an empirical analysis of US and Canadian defined benefit plans

This article investigates the characteristics of US and Canadian pension funds that allocate assets to hedge funds. The typical pension fund that invests in hedge funds is a large sophisticated pension fund that diversifies its portfolio across numerous classes of investments, private equity in particular, uses a core-satellite organization and has access to low delegation costs for alternative assets. Moreover, we find that pension funds investing in hedge funds significantly obtained higher global returns.     

Prices and market structure: an empirical analysis of the supermarket industry in Chile

This article investigates empirically the relationship between market structure and consumer prices in the supermarket industry in Chile. A panel of monthly data from 16 cities in the period January 1998–September 2006 is used. We find that, the more concentrated the industry in a city, the higher the prices, while the participation of major national chains in cities tends to lower prices. In terms of magnitude, this latter effect prevails over the former. Moreover, the dominant local chain is found to behave differently depending on whether or not one of the national chains is present in the city. Finally, we find that prices rise when a national chain acquires another chain and both were previously in a city (inmerge) while if only one of the two was present (outmerge), prices fall.     

Measuring the degree of competition in Pakistan’s banking industry: an empirical analysis

Pakistan’s banking industry has gone through significant transformation from being in a heavily state regulated and controlled environment to a more liberalized market structure in recent years. This liberalization of banking industry in Pakistan has raised concerns over the dominant banks’ exercise of market power on account of increase in market concentration due to mergers and acquisitions, high profitability in banking sector and increasing interest rate spread. Present study therefore explicitly tests the market conduct of banks using quarterly panel data of 30 banks from 2004 to 2012 and employing Panzar–Rosse, Bresnahan–Lau, Hall–Roeger and Boone’s approaches to study market power. Our findings suggest that Pakistan’s banking industry is working in a competitive environment and we find little evidence for the exercise of market power by the dominant banks. Our results remain robust across all these approaches to measure market power. These findings indicate that the liberalization and deregulation of Pakistan’s banking industry has been successful in improving the competitive conditions in the market.     

Impact of patenting on firms' performance: an empirical investigation based on manufacturing firms in India

The study aims to estimate the impact of R&D expenditure and patenting on the performance of firms using productivity, profitability and Tobin's q ratio as the performance indicators. The study uses firm-level data of 489 high- and medium-technology firms during the period of 2000–2010. We employ relatively a new source of data particularly in the context of India, firm-level patent granted, that has not been explored earlier. The study finds that firms patenting result in productivity improvement of firms, whereas R&D expenditure does not. The study further finds the evidence of positive impact of patenting on financial performance of firm with significant differences between foreign and domestic firms.     

Technology acquisition models for fast followers in high-technological markets: an empirical analysis of the LED industry

The rapid rate of technology obsolescence in many high-technology markets makes it imperative for firms to renew their technological bases constantly. Given its critical importance, the technology acquisition from the fast followers’ perspective needs to be the subject of careful analysis. This paper aims to identify the factors influencing fast-follower firms’ choice of technology acquisition model, using a multi-factorial analysis and taking into account their technological capabilities, marketing capabilities, and environmental risk tradeoffs. This study sourced data from the Securities Data Company (SDC) Platinum Database for a total of 205 instances of technological cooperation between technology holders and fast followers in the LED industry. Based on the empirical results, some significant findings were found. First, regarding technological capabilities, when fast-follower firms had greater R&D, complementary manufacturing capabilities, and technological similarities with the partners, they preferred the acquisition model that required higher resource commitments. Secondly, when fast followers had marketing channel advantages, they were more likely to choose a high resource-commitment acquisition model to obtain time-to-market benefits.     

The determinants of tendering periods for PPP procurement in the UK: an empirical analysis

The procurement of infrastructure projects via public–private partnerships (PPPs) is rising globally. PPPs are, however, often characterized by lengthy tendering periods, defined as the difference between contract notice and financial close. Tendering periods are important because they account for a significant proportion of overall project delivery time. Slow tendering deters bidders and thus reduces competition for contracts. We source data on 670 PPP projects in the United Kingdom and use a duration analysis model to empirically examine factors that impact tendering period duration. Our results reveal significant sectoral variation with projects in the health and housing sectors taking significantly longer to reach financial close. We also show that, after controlling for other factors, projects with higher capital values and projects that overlap with the timing of general elections are associated with significantly longer tendering periods. We further examine the impact of the competitive dialogue procurement method and find evidence that tendering periods have increased since 2006; the year competitive dialogue was introduced. We do, however, observe a significant reduction in the time between appointment of preferred bidder and financial close post-2006. This suggests that competitive dialogue is effective in reducing the scope for negotiations by preferred bidders holding quasi-monopoly advantages.     

Cost-effectiveness of ranibizumab and aflibercept to treat diabetic macular edema from a US perspective: analysis of 2-year Protocol T data

Abstract

Aims: Protocol T (NCT01627249) was a head-to-head study conducted by the Diabetic Retinopathy Clinical Research Network that compared intravitreal aflibercept, bevacizumab, and ranibizumab for the treatment of diabetic macular edema (DME). A cost-effectiveness analysis accompanying the 1-year data of Protocol T revealed that aflibercept was not cost-effective vs ranibizumab for all patients, but could have been cost-effective in certain patient sub-groups if the 1-year results were extrapolated out to 10?years. The present study evaluated the cost-effectiveness of US Food and Drug Administration-approved anti-vascular endothelial growth factor agents (ranibizumab, aflibercept) for treatment of DME using the 2-year data from Protocol T.

Methods: Costs of aflibercept 2.0?mg or ranibizumab 0.3?mg, visual acuity (VA)-related medical costs, and quality-adjusted life-years (QALYs) were simulated for eight VA health states. Treatment, adverse event management, and VA-related healthcare resource costs (2016 US dollars) were based on Medicare reimbursement and published literature. VA-related health utilities were determined using a published algorithm. Patients were stratified by baseline VA: 20/40 or better; 20/50 or worse.

Results: Total 2-year costs were higher, and QALYs similar, for aflibercept vs ranibizumab in the full cohort ($44,423 vs $34,529; 1.476 vs 1.466), 20/40 or better VA sub-group ($40,854 vs $31,897; 1.517 vs 1.519), and 20/50 or worse VA sub-group ($48,214 vs $37,246; 1.433 vs 1.412), respectively. Incremental cost-effectiveness ratios in the full cohort and 20/50 or worse VA sub-group were $986,159/QALY and $523,377/QALY, respectively. These decreased to $711,301 and $246,978 when analyses were extrapolated to 10?years.

Limitations: Key potential limitations include the fact that VA was the only QALY parameter analyzed and the uncertainty surrounding the role of better- and worse-seeing eye VA in overall functional impairment.

Conclusions: This analysis suggests that aflibercept is not cost-effective vs ranibizumab for patients with DME, regardless of baseline vision.     

An exploration to visualise the emerging trends of technology foresight based on an improved technique of co-word analysis and relevant literature data of WOS

To explore the possible research fronts and emerging trends of technology foresight, through integrating co-occurrence of keywords and burst terms detection into an improved technique of co-word analysis based on the relevant literature in Web of Science is proposed. Based on the new analytical technique, the links among hot keywords, burst terms are probed, and the core literature related to the emerging trend or interdisciplinary researches are identified. Obviously, the attempts of new bibliometric method in this paper could be a valuable supplement to the traditional co-word analysis; meanwhile, it maybe is much more helpful for those interdisciplinary researchers.     

Using the functional analysis to understand the emergence of biomaterials within an existing biotechnology system: observations from a case study in Turkey

ABSTRACT

The paper applies a functional approach to the analysis of an emerging technology within an innovation system (IS) in a developing country. By doing so, the paper identifies the advantages and drawbacks of the approach through a dynamic analysis and highlights the life cycle of an IS within which a new technology is emerging. This is done empirically by analysing the emergence of biosimilars within the infant Turkish biotechnology system mainly from the perspective of firms. Our analysis of the Turkish case illustrates how the tool of functional approach could be valuable in understanding the dynamics of a technology in a developing country context. Policy suggestions and implications of the study are presented as concluding remarks.